Most people don't think about their home loan until something goes wrong, like a rate rise letter in the mail. But the best time to refinance is usually before you're under pressure, when you have options.
Here are the signs it's time to look.
1. Your rate is well above what new customers get
This is the most common reason. Lenders often reserve their sharpest rates for new borrowers, while existing customers drift higher over time.
As a rough guide, if your rate is 0.30% or more above what you could get elsewhere, refinancing is usually worth investigating. On a $600,000 loan with 25 years left, a 0.30% drop saves about $110 a month, or over $1,300 a year.
With four rate rises in 2026 taking the cash rate to 4.60%, the gap between the best and worst rates in the market matters more than ever. Canstar estimated the average owner-occupier variable rate would be around 6.49% after the September rise, while competitive rates sat closer to 6.25% and some below 6.0%.
2. Your fixed rate is about to end
When a fixed term ends, most lenders roll you onto their standard variable rate, which is often much higher than their advertised rates. Start comparing 2 to 3 months before your fixed period ends. See our post on what to do when your fixed rate ends.
3. Your property has gone up in value
If your home has grown in value, your loan-to-value ratio (LVR) has dropped. Many lenders offer better rates at lower LVRs, for example below 70% or 60%. You might qualify for a sharper rate now even though you didn't when you bought.
Ask yourself: what's my home worth, and what do I owe? If you've crossed below 80%, you may also be able to avoid LMI if you refinance.
4. You want features your loan doesn't have
Many older loans don't have an offset account, or limit extra repayments. If you have savings sitting in a separate account earning taxable interest, an offset could save you more than the interest you earn.
5. You need to access equity
Renovations, an investment property, or helping kids into the market can all be funded by refinancing and releasing equity, subject to the lender's assessment. Read our guide to cash-out refinancing.
6. You want to consolidate debts
Car loans, personal loans and credit cards often carry much higher rates than a home loan. Rolling them into your mortgage can lower your monthly repayments. It needs care though, because spreading a car loan over 30 years can cost more overall. We cover this in refinancing to consolidate debt.
When refinancing might not be worth it
You're on a fixed rate with high break costs. Breaking a fixed loan can cost thousands. Get the figure before deciding.
Your loan is small or nearly paid off. The savings may not outweigh the costs and time.
You can't pass the new lender's serviceability test. New lenders test you at a rate about 3% above their actual rate. If your income has dropped or rates have risen sharply, you may not qualify. In that case, negotiating with your current lender is the better first step.
Your property value has fallen. If your LVR has gone above 80%, you may have to pay LMI to refinance. With values down in Sydney and Melbourne in 2026, check this before applying.
Try asking your current lender first
Sometimes a phone call gets you a lower rate. Tell your lender you've been offered a better rate elsewhere and ask them to match it. If they won't, that's your answer. We cover how to do this in how to negotiate a lower home loan rate.
A simple refinance health check
Grab your latest home loan statement and answer these:
- What's my current rate?
- When did I last review it?
- Is it fixed or variable? When does the fixed period end?
- Roughly what's my home worth and what do I owe?
- Do I have an offset account? Do I use it?
If you don't know the answer to question 2, it's time.
Frequently asked questions
How often should I review my home loan?
At least once a year, and whenever rates move significantly or your circumstances change.
Is there a minimum time before I can refinance?
Not usually, but some lenders charge early exit fees on loans settled under a certain period, and refinancing costs mean it's rarely worth doing within the first year unless the savings are large.
Will refinancing reset my loan term?
It can. If you refinance a loan with 25 years left into a new 30-year loan, you'll pay more interest overall unless you keep repayments at the old level.
Not sure if you're paying too much? Call Finfident on 0424 545 654 for a free home loan health check. Refinancing is what we do every day.
This article is general information only and doesn't take into account your objectives, financial situation or needs. Figures, rates and scheme rules are current as at October 2026 and can change. Finfident Finance Brokers (ABN 94 679 280 801) is Credit Representative 569374 of Outsource Financial Pty Ltd (ACN 131 090 705), Australian Credit Licence 384324.